NFTs – Not For Today?

NFTs blockchain investment

The NFT marketplace is hot right now, but before you jump in, let's examine what you're really buying and whether it makes sense.

What Gives NFTs Value?

NFTs derive their value solely from marketplace demand. Unlike traditional assets, they often lack intrinsic value beyond what someone is willing to pay. The key factors that can influence NFT value include:

  • Utility: Does the NFT provide access to services, communities, or experiences?
  • Historical trend: Is there a track record of sustained interest?
  • Brand recognition: Is it from a known artist or established project?
  • Liquidity: Can you easily sell it when needed?
  • Market willingness: Are people actively buying similar assets?

The "Lazy Minting" Reality

Many NFT creators use "lazy minting," which allows them to defer blockchain minting costs until the first sale. While this reduces upfront costs, it also means many NFTs aren't even fully committed to the blockchain until someone actually buys them.

Why Most NFT Projects Will Fail

The harsh reality is that most NFT projects lack the fundamentals for long-term success:

  1. Lack of intrinsic value: Many are essentially expensive JPEGs with no utility
  2. Oversupply: The market is flooded with new projects daily
  3. Minimal brand development: Most projects lack the marketing and community building necessary for sustained value

Critical Issues to Consider

  • Environmental impact: Blockchain transactions consume significant energy
  • Technical complexity: Many buyers don't understand what they're purchasing
  • Accessibility barriers: The technology remains challenging for mainstream adoption
  • Trend dependency: Value often relies on maintaining cultural relevance

Investment Advice

If you're considering NFT investments, remember these principles:

"Never part with more money than you can afford to lose."
  • Research the creators and their reputation thoroughly
  • Look for projects with clear utility or value proposition
  • Be skeptical of projects that can't explain their long-term vision
  • Understand that most investments in this space are highly speculative

The Bottom Line

While blockchain technology has legitimate applications, the current NFT market resembles a speculative bubble more than a sustainable investment ecosystem. Most projects lack the fundamentals necessary for long-term value creation.

Before investing in any NFT, ask yourself: "Would this have value if the current hype disappeared?" If the answer is no, you might want to reconsider.

The technology behind NFTs is interesting, but the current marketplace is largely driven by speculation rather than utility. Approach with extreme caution and never invest more than you can afford to lose completely.